bus 100 for study guide

✾ is things on the study guide

✾Definition of Business

 an organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs

✾Four types of resources managed by managers

Material, Human, Financial, Information

✾Types of Economic Structures ( planned, market, mixed)

Capitalism, communism, and socialism

✾Types of Competitive Structures- which is most common?

Perfect competition, oligopoly, monopoly, monopolistic competition (most common)

✾Factors of productions (public/private) (there’s 5)

Factors of production include labor (physical and mental), entrepreneurs, capital, land and natural resources, knowledge

✾Define capitalism

All or most factors of production are privately owned and operated for profit. Examples: Free Market system (buyer and seller freedom of choice)

What is the invisible hand?

the ability of free markets to reach desirable outcomes, despite the self-interest of market participants EX: When there are a lot of apple suppliers in an economy, the price of apples will be lower.

✾Define Communism

Government makes almost all of the economic decisions and owns almost all major factors of production (planned system)

✾Define socialism

The government owns and operates select major industries such as banking and transportation. smaller businesses are privately owned. (planned system)

✾Mixed economy

Some aspects of free market and some command Ex: Having private sectors while also having the government regulate others.

✾Define Perfect competition

Many sellers and none large enough to dictate price EX: Farmers, all products are identical

✾Define Monopolistic Competition

Products that are similar to each other but differentiated by features and branding EX: Shoe store

✾Define Oligopoly

Where small number of companies dominate the market EX: tobacco and autos

✾Define Monopoly

Usually used for water and gas (public utilities)

Define monetary policies

Focus on the size of the money supply (federal reserve) Ex: Price stability: Keeping inflation low and stable

Define Fiscal Policies

Focus on the collection of spending federal revenue (president and congress Ex: a government's plan for using taxation and spending to influence the economy

Define Federal Deficit

Federal government spends more in a fiscal year than it receives

National debt

sum of government deficits over time

Whats a good

tangible products ex food

whats a service

intangible products ex health care

✾whats an entrepreneur

someone who risks time and money to start a buisness

revenue

total amount of money a business takes in during a give period by selling good n services

profit

amount of money a business earns above and beyond what it spends for salaries (expenses)

standard of living

the amount of goods and services people can buy with the money they have (prices vary w/ location and taxes/regulations)

✾Definition of Business Ethics

the application of moral behavior to business situations

✾Factors affecting ethical behavior

personal (religion), organizational(firms reward system), environmental (social/culture)

✾Methods companies use to promote ethical behavior

compliance based, integrity based

✾Definition of Social Responsibility

businesses should consider the impact of their actions on society and the environment, not just their own profit.

✾Consumer rights- be able to recognize examples (there’s 6)

Safety, to be Informed ex: proper labeling, to Choose ex: choosing options, to be Heard ex: voice complaints, Consumer Education ex: access information, to Service

✾Definition of international business

all business transactions involving two or more countries.

✾importing

Buying products from another country

✾exporting

selling to another country

✾outsourcing

paying another company to perform a business function as manufacturing, billing, call centers, or internal IT. US company to US company

✾offshore outsourcing

outsourcing to foreign countries ex: call center in India, manufacturing in China

✾Balance of trade

total value of a nations exports compare to its imports over a particular period of time

imports>exports

trade deficit

exports>imports

trade surplus

✾dumping

selling foreign products in a foreign country at lower prices than those charged in the producing company ex: us requires foreign to include 10% overhead costs and 8% profit margin

✾How does currency valuation affect export prices

A higher-valued currency makes a country's imports less expensive at home and its exports more expensive in foreign markets

✾World Trade Organization- its purpose

international organization assigned to mediate trade disputes among nations

✾Multinational Corporations

organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management ex: apple, amazon

stakeholder

people who stand to gain or lose by policies and activities of a business ex: employees, suppliers

insourcing

foreign companies set up in the us

public factors of production

deals with the government

private factors of production

owned by llc. or partnerships

how prices are determined

supply and demand

exceed quantity demand=

lower the price

shortage of quantity

increase the prices

socialism cons

to high taxes leads to brain drain

communism cons

guess supply and demand= shortages

four types of unemployment

structural, cyclical, seasonal, frictional

frictional

people who quit because they didn’t like the job + first time people entering the work space ex: graduates

structural unemployment

restructuring of firms or change of location ex: coal miners where mines have been closed

seasonal

demand of labor changes over the year ex: harvesting crops

cyclical

business is in recession (going down)

compliance based ethics

emphasize unlawful behavior by increasing control and penalizing wrongdoers ex: to avoid criminal misconduct

integrity based ethics code

ethical standards that define the organizations guiding values, stress shared accountability among employees

comparative advantage theory

Theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently.

absolute advantage

The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.